CHAPTER ONE

INTRODUCTION

This chapter clearly outlines the background of study, problem statement,

objective of the study, research question, significance of the study, scope and
limitation of the study, operational definition of terms and plan of work.

1.1BACKGROUND OF THE STUDY.

Microfinance institution is a provider of credit. However, the size of the loans is

smaller than those granted by traditional banks. These small loans are known as
Microcredit. Throughout the world, the poor are excluded from the formal
financial system. This is because this system encompasses a network of
institutions offering their services to high income earners which they consider
credit worthy. In addition, even when the services are available to the poor or
low income earners, they are usually not affordable due to the high cost
associated. Microfinance encompasses the provision of financial services and
the management of small amounts of money through a range of products and a
system of intermediary functions that are targeted at low income clients.
(Asiama, 2007), Micro finance has several benefits for developing nations.
Microfinance institutions (MFIs) have become the main source of funding micro
enterprises in Africa and in other developing countries. As pointed out by the
former UN Secretary General Kofi Annan during the launch of the International
Year of Micro Credit (2005), “Sustainable access to microfinance helps alleviate
poverty by generating income, creating jobs, allowing children to go to school,
enabling families to obtain health care, and empowering people to make the
choices that best serve their needs." (Kofi 2003). Microfinance is not a new
concept. It dates back in the 19th century when money lenders were informally
performing the role of now formal financial institutions. The informal financial
institutions constitute; village banks, cooperative credit unions, state-owned
banks, and social venture capital funds to help the poor.
These institutions are those that provide savings and credit services for small
and medium-size enterprises. They mobilize rural savings and have simple and
straightforward procedures that originate from local cultures and are easily
understood by the Population (Germinis et al., 1991). These funds are to finance
the informal sector Small and medium-sized enterprises in developing countries
and it is known that these small and medium-sized enterprises are more likely to
fail (Maloney, 2003). The creation of Small and medium-size enterprises
generates employment but these enterprises are short live and consequently are
bound to die after a short while causing those who gained job positions to lose
them and even go poorer than how they were. It is not until recently that
microfinance had gained recognition thanks to the noble prize winner Yunus
Muhammad of the Grameen Bank. The idea of microcredit was borne, which
later evolved to microfinance. Microfinance is defined as the provision of
financial and non-financial services such as saving, loan and insurance, to the
poor or low-income earners, as well as to those excluded from the formal
financial system. These institutions provide financial and non-financial services
to the poorest, economically active citizens, which at the same time are poor,
and to Small and Medium Enterprises. It should be noted that productivity,
performance, and profitability of Small and mediumsize enterprise depends
much on both financial and non-financial services. According to (Mosley,
2001), microcredit seems to be a cheap way of getting loans to Small and
medium-size enterprises. The private sector of Cameroon is far better off than
the public, in terms of performance and contribution to economic development.
Small and Medium Enterprises (SMEs), sometimes referred to as micro, small
and medium enterprises (MSMEs) play an important economic role in many
countries. The growth of SMEs has been in the recent past of great concern to
many government policy makers and researchers globally because of realization
of their economic contribution to Gross Domestic Product (GDP) and economic
growth. As such they are no longer viewed as “stepping stones” to real business
but as a means of industrial and economic growth and as well as tools of poverty
eradication. In addition, it is clear that SMEs make up the greater portion of the
private sector, with their ever-increasing importance in economic development
and poverty alleviation. However, they face a major hindrance in terms of
accessing finance from the formal sector. A World Bank review of 2005
declared that about 70% of SMEs in Cameroon lack access to adequate
financing. The issue is relevant especially considering the fact that most
financial institutions in Cameroon have excess liquidity. This may be because of
the lack of viable information about these SMEs on the side of the Banks, as
well as the uncertainty associated with their cash flows, creating a hazardous
situation, making most banks reluctant to invest in such ventures. Even when
financing is available, SMEs clients are not always comfortable with the credit
terms and once granted, the fund it put into a different use not stated in the
contract. For this reason, Microfinance institutions through their methodology
and services they offer are in the best position to deal with this problem, by
offering financial and non-financial services to their SMEs clients and due to the
inherent proximity, the have with their customers they are able to monitor the
loans at a lower costs. The Small and Medium Enterprises (SME)
aforementioned are those having an employee base up to 100. Due to the nature
of their activities and considering the fact that most of them (especially small
business) operate at the informal level, they require financial services tailored to
their circumstances in order to be sustainable, services, which are barely offered
through the formal financial system. This is important as 95% of businesses in
Cameroon falls within this category. The main idea behind the concept of
microfinance is poverty alleviation and this will hardly be achieved if these
institutions engaged in offering their loan services for instance, only for
consumption purposes (consumer loans). For this reason, microfinance
institutions through the provision of financial services especially microcredit to
their SMEs customers as well as other non-financial services helps in sustaining
the business, which will create and maintain employment, contribute to the
economy’s GDP, thereby satisfying all of its stakeholders How then are these
microfinance institutions of significance to the sustainable development of the
country? Researchers have viewed microfinance in different dimensions.
Microfinance gives people new opportunities by helping them to get and secure
finances so as to equalize the chances and make them responsible for their own
future. It broadens the horizons and thus plays both economic and social roles by
improving the living conditions of the people (Microfinance Radio Netherlands,
2010). A recent development in this sector has been the increasing involvement
of Non-Governmental Organization and microfinance institutions in the process
of enhancing the development of Small and medium-size enterprises,
particularly at the rural level. The question now is; why microfinance at this
point in time? A Roman Catholic priest from Holland by the name of Rev.
Father Anthony Jansen brought the notion of credit unions into the country. This
was a result of complaints that were coming up from farmers and inhabitants in
the locality in which he was living. Among the difficulties or complaints faced
by these locals; was the issue that most of them often save their money by
hiding in some parts of the house, in which case ants often eat them up; again
some farmers sold their crops before harvest due to fear of the lack of storage
facilities. Further still, why are farmers not cultivating on a large scale to
increase their wealth and improve their living standards? It is important to look
at this because even though the government promotes Small and medium-size
enterprises in the rural areas through different institutions, microfinance
institutions are not leaving any stone unturned to make sure that the acute
poverty striking the rural population is redressed. Agriculture and Small and
medium-size enterprise are the key sectors to the government and of course, has
a great influence in the socio-economic development of the country but
productivity and development keep on dropping with a rising population. In
regard, we shall examine how microfinance institutions through the provision of
their financial and nonfinancial services to SMEs, alleviate overall poverty,
promoting a safe and sound economy.

1.2 STATEMENT OF THE PROBLEM.

Many small and size medium enterprises owners lack the know-how to manage
finances necessary for entrepreneurial businesses so that they can sustain
gradual growth. The problem of lack of micro-credit loans has contributed to the
inability of the small and medium enterprises to grow while other enterprising
people cannot do so for they lacked the capital to put up small enterprises. The
irony is that many microfinance organizations appear to provide remedies to the
exact challenges that led to the failure of small businesses. This, therefore,
underlines the need for the present study which sought to establish the role of
Microfinance Institutions on the growth of Small and medium-sized enterprises
(SMEs) with a focus on SMEs in Yaoundé in the center region. Cooper (2012)
affirm that microfinance has become a prominent approach in the development
and promotion of Small and Medium Enterprises (SME) all over the world. The
industry is viewed as critical in boosting private-sector growth through assisting
small and medium-sized businesses. The MFI's resource base can serve as a
platform for SMEs to expand and contribute to poverty reduction. Microfinance
is an important part of Cameroon’s economy, providing a variety of financial
and non-financial services to both urban and rural areas. Loans, deposits,
savings, micro-insurance, and money transfer services. However, there is
insufficient empirical evidence to support the role of microfinance service
delivery in bridging the SME growth gap. This study focused only on the aspect
of finance and loans to SMEs and the speed of processing loans by MFIs. The
study is limited in the sense that the growth of SMEs is influenced by factors
other than credit facilities. Therefore, the study does not adequately address the
issue of growth for these SMEs as a result of services offered by MFIs. Kyale
(2015) aimed to establish the impact of microfinance institutions on the growth
and development of small and medium enterprises and found out that
microfinance institutions provided a series of products and services that include
small-scale business management training and financial literacy skills. This
study focused only on management training and financial literacy skills. The
study is limited in the sense that microfinance institutions provide other services
that influence the growth of other factors other than business training factors.
The study does not effectively address the subject matter of growth for these
SMEs which has been addressed in this study. Mutuma and Omagwa (2019)
studied microfinance services and the financial performance of small and
medium enterprises. The findings indicated that MFIs funding contributed to the
increase of entrepreneurs who started new ventures. This study focused only on
microfinance services and the financial performance of SMEs who are venturing
into business. Only microfinance services and financial performance are
examined in this study. Consequently, the study does not address the question of
how microfinance institutions affect the growth of small and medium-sized
businesses. This study, therefore, aimed at determining the role of Microfinance
institutions on the growth of small and medium-sized enterprises within
Yaoundé in the center region. It focused on three specific areas namely;
financial services, training services, and advisory services.

1.3 RESEARCH QUESTIONS.

1.3.1 Main research question.

What is the impact of micro finance on the growth of small and medium size
enterprises?

1.3.1 Specific research questions.

➢ How does the access to micro finance products and services affects the
growth of SMEs?
➢ To what extend does the access to training session/programs in microfinance
institution affects the growth of small and medium size enterprises?

1.4. RESEARCH OBJECTIVES

1.4.1 General Objective:

The general objective of the study was to assess the impact of microfinance
institutions on the growth of Small and medium-sized enterprises (SMEs).

1.4.2 Specific Objectives:

The study was guided by the following specific objectives:

➢ To examine the effects of financial services on the growth of Small and

medium-sized enterprises.

➢ To determine the effects of training sessions/programs on the growth of Small

and medium-sized enterprises.

1.5RESEACH HYPOTHESIS.
A) NULL HYPOTHESIS(HO)

HO: microfinance institutions have no impact on the growth of small and

medium size enterprises.

B) ALTERNATIVE HYPOTHESIS (H1)

H1: microfinance institution has a significant Impact on the growth of small and
medium size enterprises

1.6 SIGNIFICANCE OF THE STUDY.

➢ To the enterprise.

For small and medium-sized enterprises, this study was beneficial, as it helped
to make proper use of savings and manage finance properly. The owners of
SMEs would gain awareness of the value of the microfinance services needed to
boost their financial efficiency. It adds Knowledge to SME managers to help
them participate in continuous quality enhancement, thereby ensuring business
development and maintaining a safer and healthier atmosphere that would boost
their public profile.

➢ To policy makers. The study provided economic policy developers with

insight into the activities of small and middlemen and provide a realistic guide
to designing new broad policies that could encourage the growth of small and
medium-sized enterprises' ventures. This would help them to define or review
strategies and recommendations for small and medium-sized businesses in
general. The Government would benefit from the study findings and
recommendations for policy. implementations relating to SMEs turn over tax
payment, regulations of SMEs, incentives to be provided and subsidies to
support their growth

➢ To other researchers. The results of this study would contribute to existing

SME sector awareness and further studies on micro-finance services for small
and medium-sized enterprises. The results of this study would help future
researchers, they would use it as a guide for their own studies. The findings
would help them build and develop their research gaps.

1.7 SCOPE AND LIMITATION OF THE STUDY.

The study was limited to relationship between role of microfinance institutions

and growth of Small and medium-sized enterprises (SMEs) within Yaoundé.
Growth was measured using increase in profit and capital. The research focused
on three specific variables namely; financial services, training services and
advisory services. The scope of the study was conducted for a period of three
months between MARCH 2025 and JUNE 2025 at la MEC SA MELEN. The
study targeted small and medium enterprises which were classified from general
merchandise, electronic shops, beauty shops, restaurants and boutiques located
in Yaoundé. The study made use of correlational research design to investigate
the relationship between variables. The research study made use of a structured
questionnaire to collect data. Data was collected from SME owners and
employees.

1.7.1 OPERATIONAL DEFINITIONS OF TERMS.

INTRODUCTION

In this study we have key concepts on which an emphasis should be laid on and
these concepts are clearly defined in the followed paragraph below;

I. Microfinance:

Microfinance is defined as an array of financial services, including loans,

savings and insurance, available to poor entrepreneurs and small business
owners who have no collateral and would not otherwise qualify for a standard
bank loan.

II. Enterprise:

This can be defined as any institution or organization that is set up to carry out
business activities with the aim of making profit and satisfying public wants.

III. Microcredit:

Microcredit, also called micro banking or microfinance, a means of extending

credit, usually in the form of small loans with no collateral, to non-traditional
borrowers such as the poor in rural or undeveloped areas. According to (MIFOS
2005), microfinance is sometimes called “Banking for the poor”. This is because
through access to these services, low income people around the world are able to
pull themselves out of poverty.

IV. Financial intermediary:

 Financial intermediaries are financial institutions which link lenders with
borrowers by obtaining. Deposits (through various accounts) from depositors
and lending them to borrowers. They are specialized. Financial firms that
facilitate the transfer of funds from savers to demanders of capital.

V. Money deposit bank:

They are resident depository corporations and quasi corporations which have
any liabilities in the form of deposit payable on demand, transferable by cheque
otherwise usable for making payment.

VI. Microfinance Institutions

A microfinance institution is an organisation that provides financial services

such as loans, savings accounts, insurance, and other basic financial products, to
individuals, small and medium size enterprises or businesses who typically lack
access to traditional banking services. It is designed to meet the financial needs
of low income individuals and communities who are often excluded from the
formal banking sector due to factors such as poverty, limited collaterals, and
lack of credit history.

VII. Small and Medium

Enterprises Cameroon’s official definition of SME which is adopted in this

study recognizes SMEs concerning employment size: Microenterprises (1-9
employees), Small Enterprise (10-49 employees), and Medium Enterprise (50-
99 employees). The term "employment" in this context does not necessarily
imply partially or fully paid employment; rather, it refers to the entire number of
individuals working in the business, whether partially, fully, or not paid (RoK,
2016). These are enterprises that have under 500 employees in the developed
countries and below 100 employees in developing nations (UNCTAD, 2011).

VIII. Financing
The act of giving money for commercial activities, purchases, or investments is
referred to as financing. Providing capital to businesses, customers, and
investors is at the heart of what financial institutions and banks do. The use of
financing is vital in any economic system, as it allows companies to purchase
products out of their immediate reach (Reiter, 2019).

IX. Training

Training is a set of activities which are aimed at improving one's performance

in that activity or set of activities by changing one's attitude, knowledge, or skill
behaviours. Its purpose, in the work situation, is to develop the abilities of the
individual and to satisfy the current and future manpower needs of the
organization (Ross, 2018).

X. Advisory Services

These are a range of consulting services provided by Certified Public

Accountants (CPA) and other financial advisors such MFIs to businesses and
high net worth individuals who require specialized advice on capital formation,
cash flow, and wealth management (Pajares 2012). XI. Growth. Growth is the
act or process of expanding, or a method of growing; it is often referred to as
development or progressive increase (Miller, 2021).

1.8 PLAN OF WORK (ORGANISATION OF THE STUDY).

The introduction chapter looks at the background of the study, problem

statement, objective of the study, research questions, the scope and limitation,
and operational definitions of key terms. The background of the study is based
on the topic which is to find out the impact of Microfinance Institutions on the
growth of Small and Medium Size Enterprises within Yaoundé in the center
region. The general objective of the study was to assess the role of Microfinance
Institutions on the growth of Small and medium-sized enterprises (SMEs) within
Yaoundé. The study may help in identifying how access to Microfinance loans
can enable Small and Medium Size Enterprises to progress and grow against
competition, regulations, and other internal and external factors and to reduce
the problem of SMEs collapsing and not growing to attain their full potential.
The study’s scope focuses on the owners and employees of these SMEs who
were approached during data collection which aided in the research and analysis.
Theories and empirical literature reviewed are presented in chapter two.
Conceptualization of the study variables was also done in chapter two. Chapter
three presents methods and processes of choosing the targeted population,
sampling techniques, collection procedures, analysis of data and data
presentation. Chapter four presents the research findings and discussions and
chapter five culminates with summary of findings, conclusions and
recommendations.

1.9 ORGANISATION OF THE STUDY

The research work is divided into five (5) chapters;

Chapter one, is dedicated to the introduction and research context. Further

sections have addressed the problem statement, research questions, research
objectives, research hypothesis, significance of the study and scope of the study.

Chapter two, is devoted to literature review which is sub divided into

conceptual review, theoretical review, empirical review, and presentation of
internship activities.

Chapter three is all about methodology. Which include study design, study
population and sampling techniques, data collection procedure, data analysis
procedure and estimation technics and ethical considerations.

Chapter four Is devoted to presentation and discussion of findings. It includes

descriptive statistics and test of hypothesis.

Chapter five is dedicated to discussion of findings, conclusion and

recommendations. It is sub divided into summary and discussion of findings,
conclusion, limitations of the study, area for future research, references and
appendices.

CHAPTER TWO:

LITERATURE REVIEW

2.1 INTRODUCTION

The chapter presents the reviewed literature on theory supporting the variable.
The empirical reviewed literature related to microfinance services and growth of
SMEs. Theoretical review presents theories explaining the interrelationships
between the study variables. The empirical literature presents the scientific
findings from the related studies. Conceptual framework presented the
ideological conceptualization of the study variables.

2.2 CONCEPTUAL FRAMEWORK.

A conceptual framework is a structured system that outlines the key concepts,

variables, and their relationship within a specific research study. It serves as a
guide to help researchers understand and analyse the phenomena being studied.
As for my topic: THE IMPACT OF MICROFINANCE INSTITUTIONS ON
THE GROWTH OF SMALL AND MEDUIM SIZE ENTERPRISE, the
independent variable is “THE IMPACT OF MICROFINANCE
INSTITUTIONS” and the dependent variable is the “GROWTH OF SMALL
AND MEDUIM SIZE ENTERPRISES”.

2.2.1: THE INDEPENDENT VARIABLE (THE IMPACT OF

MICRIFINANCE INSTITUTIONS)

THE IMPACT OF MICROFINANCE INSTITUTIONS; this refers to the

availability and accessibility of financial services provided by microfinance
institutions to small and medium size enterprises. It includes services such as
loans, savings account, and other financial products designed to support the
financial needs of these businesses.

A) FORMS OF MICROFINANCE INSTITUTIONS

 MICROLOANS: these are small loans offered to entrepreneurs who
do not qualify for traditional bank loans.
 SAVINGS ACCOUNTS. Products that allow SMEs to save money,
often with favourable terms compared to traditional banks
 MICRO INSURANCE: insurance products tailored for low income
individuals and small businesses to protect them against various risks.
 TRAINING AND SUPPORT SERVICES: non-financial services
that help SMEs develop business skills and financial literacy.
B) IMPORTANCE OF MICROFINANCE INSTITUTIONS
 FINANCIAL INCLUSION: They provide access to capital for SMEs
that lack traditional operations.
 BUSINESS GROWTH: facilities expansion by enabling SMEs to
invest in resources, inventory, and technology.
 JOB CREATION: supports the establishment and growth of
businesses, leading to increased employment opportunities.
 POVERTY ALLEVIATION. Helps improve the financial stability of
entrepreneurs, which can lead to Improved living standards and
reduced poverty.

Understanding the impact of access to microfinance is crucial for

policymakers and stakeholders aiming to enhance the growth of SMEs and
overall economic development.

2.2.2: THE DEPENDENT VARIABLE (GROWTH OF SMALL AND

MEDUIM SIZE ENTERPRISES)
GROWTH OF SMEs: this refers to the increase in various metrics of
SMEs, such as revenue, number of employees, market share, and overall
business expansion. Growth can be both quantitative (financial performance)
and qualitative (improvements in products quality, customer satisfaction,
etc).

A) FACTORS AFFECTING THE GROWTH OF SMEs

 Access to finance: availability of capital from various sources
including microfinance, banks, and investors.
 Market demand: consumer demand for products or services offered
by the SMEs.
 Technology adoption: use of technology to improve efficiency and
reach new customers.
 Regulatory environment: government policies, regulations, and ease
of doing business in the region.
 Management skills: the entrepreneurial skills and business acumen of
the SMEs owners.
 Competition. The level of competition in the markets, which can
influence pricing and the market share.
B) MEASURES OR DIMENSIONS OF SMEs GROWTH.
 Revenue growth: increase in sales and income over a specific period
 Employee growth: changes in the number of employees, indicating
expansion.
 Market share: the percentage of the market controlled by the SME
compared to competitors.
 Profitability: improvement in profit margins and net income.
 Customer base expansion: growth in the number of customers or
clients served.
 These factors and measures help assess the effectiveness of microfinance
and other influences on the growth trajectory of SMEs.

2.2: THEORETICAL FRAMEWORK.

This section deals with some of the various theories relating to the financial
structuring of SMEs. The theories discussed under here are the bank capital
channel model, the pecking order theory, the lifecycle theory, the financial
growth theory, and contract theory. According to iherudu (2012), the emerging
theory of microfinance can be stated to be that microfinance programmers
constitute and provide the drive to develop a broad access to the financial
resources crucial to the poor, in order to provide the basic requirements for
sustainable economic development for the state.

2.2.1: The Bank Capital Channel theory.

This model implies that the lending behaviour of banks to SMEs is heavily
dependent on capital adequacy requirement. (Obamuyi 2007) showed that a
change in interest rate can influence banks’ lending to SMEs through bank's
capital. This implies that increasing the value of interest rates raises the cost of
bank's external funding, but reduces bank's profits and capital. The tendency is
for the banks to reduce their supply of loans if the capital constraint becomes
binding. On the other hand, the banks could also become more willing to lend
during situations when the interest rate is favourable.

The Bank Capital Channel Model attempts to find a rational between the lending
behaviour of institutions involved in basic banking activities (savings and
lending). The model looks at interest rate volatility as a determining factor when
it concerns financial treatment, particularly when their total amount for loan
purpose is brought down by the strength of their capital base (adequacy
requirement). This theory was found applicable to MFIs, especially as they
perform the same basic activities of lending and deposit collection, and are
subject to capital adequacy requirements. For this reason, shall the prevailing
interest rate increase, the “credit/loan officer” or the CRMC (Credit Risk
Management Committee), may decide to reduce the level of their external
borrowings, having less liquidity to give out as loans. In an ideal situation, the
CRMC of the bank may simply shift the burden of the increase to the customers
through further increases in lending rates. However, this is not ethically feasible
as MFIs customers are believed to be low income and marginally excluded
people, who need to be helped. For this reason, a direct solution to be
implemented by the CRMC may be to reduce the volume of loans given out at
least until the situation improves. The issue will get even worse if the capital
adequacy level is increased, as both tools (Interest rates and capital requirement
increase) are used by the Regulators to implement Contractionary monetary
policies in the economy.

2.2.2: Information Asymmetry.

Theory Akerlof and Stiglitz established this theory in the 1970s. Information
asymmetry is when the owner is more aware of business opportunities and
threats than the lender. Knowledge asymmetry creates negative choices and
moral risks that widen the financial gap, as financial institutions are reluctant to
lend to volatile SMEs. The main partnerships do not suffer from market
asymmetry in the right market environment, all parties have access to complete
and inexpensive knowledge, and there are no uncertainties about current and
future trading terms.

But real-world knowledge is neither ideal nor expensive. In addition, risks and
uncertainties about future situations are characteristic of SME financial markets
(Lean and Tucker, 2001). The risk category of Altman (1968) reflects this.
SMEs are primarily interested in profitable businesses where they mistakenly
reject credit. The prevalence of such errors creates a funding gap (Lean &
Tucker, 2001). This reduces the risk of liability for information asymmetry to
micro insurance. But real-world knowledge is neither ideal nor expensive. In
addition, risks and uncertainties about future situations are characteristic of SME
financial markets (Lean and Tucker, 2001). The risk category of Altman (1968)
reflects this. SMEs are primarily interested in profitable businesses where they
mistakenly reject credit. The prevalence of such errors creates a funding gap
(Lean & Tucker, 2001). This reduces the risk of liability for information
asymmetry to micro insurance.

2.2.3: Sustainability Theory.

Sustainability theory was developed by Eckardt (1992). This theory focuses on

the ability of microfinance organizations to offset long-term operating costs
while meeting customer needs. In order for a financial institution to exist, a
microfinance institution needs to reconcile the interests of the financial
institution with the interests of welfare. The financial sustainability of
microfinance institutions has two aspects: an internal aspect focused on deposits
and savings, and an external aspect focused on the availability of loan loans for
future credit (Morduch, 2002). This was an important hypothesis for this study,
as SMEs benefit from achieving these social goals. Microcredit, micro-
investment, and micro-insurance systems have these advantages.

2.3: EMPIRICAL REVIEW.

This section presents the studies reviewed which relates to the variables under
consideration. The studies reviewed related to microcredit services, micro
saving services and micro insurance services and how they affect growth of
SMEs.

2.3.1: Microfinance and Entrepreneurship.

Sakthi (2011) and Praveen Kumar S. conducted a research study about the role
of microfinance institutions in the development of entrepreneurs in Africa. The
study is focus for entrepreneurs who want to run a business and yet can't afford a
piece of equipment and merchandise. The research whereby providing
equipment or merchandise to enable the project to run a self-funding profitable
project. The research finds out that only 6 % of Africans borrow money to start a
business where as 13 % borrow to buy 18 foods. 50 % of the population live
with less than 1US$ or less per day. Most of the Africans lack the understanding
of what it would take to successful entrepreneurs. They lack necessary technical
management skills and confidence. They lack personal ambition and willingness
for fear of sharing ownership and failed to form partnership.

Olu (2003) investigates the impact of microfinance on entrepreneurial

development of small scale enterprises that are craving for growth and
development in a stiffened economy called Nigeria. The study reveals that (i)
there is a significant difference in the number of entrepreneurs who used
microfinance institutions and those who do not use them; (ii) there is a
significant effect of microfinance institutions activities in predicting
entrepreneurial productivity; and (iii) that there is no significant effect of
microfinance institutions activities in predicting entrepreneurial development.
The researcher concludes that microfinance institutions are identified to be one
of the key players in the financial industry that have positively affected
individuals, business organizations, other financial institutions, the government
and the economy at large through the services they offer and the functions they
perform in the economy.

2.3.2: The Role of Microfinance institutions in growth SME.

Many international organizations around the world have recognized the

relevance of SMEs in economic development (UN, USAID, etc.). This is
because they are critical in creating jobs, reducing poverty and improving living
standards in the country. Apollo K.O (2013), conducted a study aimed at
analyzing how the provision of financial and non-financial services like; Seed
Capital, Financial Skills training, provision of role models and saving
mobilization by microfinance institutions affected small and medium size
enterprises in the Gikomba Market, Nairobi, Kenya etc. In the course of his
work, he used data collection techniques like questionnaires, interviews and a
descriptive statistic method to assess the influence of the above independent
variables on small and medium enterprise growth. To this effect, he found out
that there exists a strong relationship between seed capital and small and
medium enterprises growth (96% of respondent saying it was necessary), as
without this capital, the business will remain an idea which cannot be
implemented. Also, the study revealed that financial skills affected the growth of
the SME, even though some business managers didn’t any background in
financial management, majority of them benefited from training by these
microfinance institutions. Both role model and Savings mobilization were found
relevant to small and medium enterprise growth within the study. The researcher
therefore concluded that microfinance institutions within the locality should
make efforts to increase the provision of their seed capital to SMEs, not only
under a group lending program, but also on individual basis. Also, increasing the
number of small and medium enterprise owners trained to financial
management, by employing field agents to sensitize the business owners on the
benefits of financial management skills and improve on their savings
mobilization methodology.

Other scientists like Gathogo P.K (2014) supported this thesis by conducting a
study aimed at analysing the effect of microfinance institutions on the growth of
SME capital, human resources, taking Kiambou County as his case study. In his
work, he used descriptive and inferential statistics to assess the influence of
Microfinance institutions on the above SMEs performance indicators. The study
established that savings remains the most important source of finance
throughout the business cycle and even though the MFIs play a smaller role in
economic empowerment of SMEs, they are with no doubts key elements for
small scale enterprises to succeed in their drive to build productive capacity, to
compete, to create jobs and to contribute to poverty alleviation in the country.
For this reason, the researcher suggested that MFIs should find innovative ways
to finance SMEs for successful growth. This may be through their collaboration
with self-help groups as well as pyramid schemes in generating start-up capital
for SMEs. The study recommended that MFIs should play a critical role on the
growth of human resource capital. This will make SMEs labour force to be more
productive. MFIs are also recommended to intensify and continue business
training to small and medium scale entrepreneurs.

2.3.3: Microfinance and Financial Regulation.

It is clear that microfinance institutions operate within a very sensitive sector

portrayed by its intense regulation in Cameroon. However, the number of MFIs
operating in Cameroon keeps on reducing. Some MFIs have shut doors within
the last two years. To this effect, Akume D.A and Badjo N.M.A (2017), two
associate Professors from the Higher Technical Teacher Training College of the
University of Bamenda, wrote a paper which assess the effect of Financial
Regulation on the performance of Microfinance institutions in the Anglophone
region of Cameroon. They found out that regulation elements such as risk
coverage ratio and fixed assets coverage ratio were found to affect MFIs
performance negatively and significantly whereas the size of the MFI, the
Anglophone region and Deposit interest rate were positively and significantly
associated with MFIs performance. The study also revealed that MFIs in from
urban areas are more efficient than those from rural areas; the same as MFIs
from the Anglophone region are more efficient that those from the francophone
region. The researchers commonly recommended the implementation of a
national regulation framework taking into account national and local entities by
all microfinance stakeholders. Also, the creation of a rating agency by the
government in order to evaluate and publish performance of MFIs so as to detect
problems in the early stage and deal with them in order to avoid a crisis in the
sector.

Another work was carried out by Lewa D, M (2010), which assesses the role of
supervision and regulation of micro finance on non-deposit taking microfinance
institutions. The study was aimed at determining whether regulation enables or
created barriers to access financial services by the unbanked population of South
Africa. The researcher used a purely qualitative methodology in the course of
collecting his information. The result indicated that while regulation is definitely
not the sole factor responsible for the state of development of the South African
microfinance market (macroeconomic reforms have also played a key role) it
constituted a facilitator to enhance growth of the industry, by setting standards,
increasing efficiency and promoting fair competition while strongly protecting
consumers.

2.4: PRESENTATION OF INTERNSHIP ACTIVITIES.

The history of the organisation LA MEC SA is a public limited company with

shares open to the general public.it was created in 1997 in accordance with the
law Number 00235/MINFI du 08/05/2002 on cooperative societies it is 2nd
category microfinance governs by the regulation No 00202/MINFI of
08/05/2020 .it was created in 1997 and was first created as a category one (01)
and was first in the form of cooperative, that is it was only open only to his
members and without any stated capital. At a moment the microfinance changes
the status from category one to category 2 and is now open to the general public
it which everybody can hold any types of account he wishes. It is a public
limited company with 5000000000 FCFA as stated capital. It is an agency of 8
branches with the main agency located at Tsinga. These branches can be seen as
follows.

Some of the different agencies of LA MEC SA include;

• La MEC SA agency which is the main agency located at TSINGA

• La MEC SA agency located at TSINGA in front of hotel de prince

• La MEC SA agency located at warda in front of DJEUGA PALACE

• La MEC SA agency located at Melen

• La MEC SA agency located at Emana borne frontaine

• La MEC SA agency located at BAFOUSSAM

• La MEC SA agency located at AKWA

• La MEC SA agency LOCATED at BANGANTE

• La MEC SA agency located at DAMAS

• KRIBI and others cities (soon)

LA MEC SA has made available to customers a wide range of product and

services, some of their products are as follows.

1.Current account: this is an account that record customers demand deposit.

this account is not remunerated and a cheque book is issued to the customers in
other to avoid congestion and the counter. The minimum amount needed to open
the account is 25000FCFA. A current account is designed for frequent
transactions and day-to-day banking activities. It allows you to deposit money,
withdraw cash, write checks, and make electronic payments. Checking accounts
often provide a debit card and may offer overdraft facilities.

2.Saving account: A savings account is meant for holding money that you want
to save and earn interest on. It typically has an interest rate compared to other
investment options but provides easy access to funds. Savings accounts are
suitable for short-term goals or emergency funds. It is remunerated at the rate of
3 % per year on the amount collected. The minimum amount to open a saving
account at LA MEC SA is 16000 FCFA.
3. Association account: this is an account for a group of association and it is
mostly used by moral person. And there is fixed or latest day in which people or
members are supposed to deposit after the mature date penalties are levied and
penalties fees are given to the beneficiary.

4. Banc assurance: is also a marketer of insurance product, sponsored account

insurance through arrangement between the microfinance and the insurance
company.

5. Term deposit account: this is a type of account where the customer deposit
money for a predetermined period and earn an interest on the amount deposit.

2.4.1: ORGANISATIONAL STRUCTURE OF LA MEC SA.

GENERAL ASSEMBLY

BOARD GENERAL SUPERVISORY BOARD

CREDIT HUMAN RESOURCE

COMMITTEE COMMITTEE

GENERAL DIRECTORATE
2.4.2: INTERNSHIP INTRODUCTION.

An internship is a temporary work opportunity provided by an organisation or a

company to individuals usually students or recent graduates, who wants to gain
practical experience in a particular field. As a level 3 student in banking and
finance, I had the opportunity to undertake an internship at la MEC SA
microfinance, a prominent institution in the field. it is of most importance to
carry out an internship to enable the obtention of the PROFESSIONAL
LICENCE in Banking and Finance and to achieve a better mastering of the
microfinance concept which is being practice in Cameroon. My internship
program started on the 24th MARCH- 24th JUNE 2025, from Monday to Friday
usually from 7:30am – 4:30pm and on Saturdays from 7;30 am – 12;30 at la
MEC SA MELEN. On my arrival at la MEC SA MELEN, on the first day, I was
received by the secretary, which then introduced me to all the departments of the
agency. They all welcomed me and gave a brief introduction of all the activities
performed in the different departments there by exposing me to various aspects
of the organisations operations, which gave me the comprehensive view of the
micro finance industry. then an internship program of all my day to day
activities in each department was handed over to me.

INTERNSHIP ACTIVITIES AND DEPARTMENT OF WORK

La MEC SA MELEN is a company based in Cameroon. La MEC is a 2nd

category micro finance institution licensed by COBAC in 2002 and since then
has experienced an expansion in her organizational structure. The various
departments are as follows;

➢ Customer services department.

➢ The Financial department.

➢ The Commercial department.

➢ Credit department.

a. Customer Service Department: Commonly referred to as the bank’s

doorstep, this is the first service a customer encounters when entering the
institution. It welcomes and informs customers about the products marketed by
the establishment and performs day-to-day counter operations. It receives the
different customer, learn about their needs and direct them according to their
needs in the different corresponding services then offer them a cup of coffee.
We started with this service. In permanent contact with customers, it was a
question for us to inform customers and to carry out the following tasks; -
Welcome, inform, detect needs, advice and direct the customer to the right
interlocutor within the agency.

-Update commercial files, provide information regarding the opening of an

account, suggest the type of account to adapt and direct the customer to the
relationship officer. -Help customers in the filling of various slips in case of
difficulties. -Replenish the stock of supplies at the counter (deposit and
withdrawal slips, cheque remittance slip, push and pull forms, electronic
product). -Support customers with the use of remote services (MTN Mobile
money, Orange mobile money and ENEO payment).

b. The Financial Department: The finance department is one of the most

important and very sensitive department in the bank. This is because this
department is responsible for the management and control of the cash inflow and
outflow of the institution. This department is also to ensure that the financial
objectives of the enterprise are being achieved. Furthermore, the financial
department is made up of; an accounting office, an auditing and control office, a
budget office.

C. The Commercial Department: The commercial department has as principal

function to bring in new customers to the company and ensure a close following
of the current customers in other to assure their satisfaction. This department is
made up of a communication and customer service office. The commercial has
the obligation to educate individuals in other to let them understand that
microfinance institution is beneficiary to everybody and in all context. The
commercials also carry out prospection that is, going out on the field to found, to
search for customers and follow up these customers in other to build a long term
relationship. This department also carries out advertisement and create
awareness on the new services offered by La MEC SA.
d. Credit department: Credit administration is a department in a bank or
lending institution that is tasked with managing the entire credit process. Credit
administrators are responsible for conducting background checks on potential
customers to determine their ability to pay back the principal and interest. The
credit department has as principal function to;

- Maximizing sales.

- Accelerating cash inflow.

- Minimizing bad debt losses.

- Reviewing and approving new accounts.

- Developing and updating credit and collection policies.

- Establishing appropriate credit limits and terms of sale for new and active
customers.

3.7 APPLICATION OF TOPIC TO INTERNSHIP.

I began my internship on 18th JUNE -19 th August at la MEC SA MELEN.

During this period of two months, I had the privilege to visit the different
departments of the enterprise. The activities I carried out were as follows.

1st and 4th WEEK: During the first two weeks, I was at the reception in which
the principal activities there was to welcome customers and give them an
orientation depending on the service desired. This activity has enabled to collect
data on small and medium size enterprises.

3rd and 4th WEEK: During the third and fourth week I was sent at the
production department where I carried out registration of files. This enabled me
to collect data on the documents required for the registration of a contract.
5th and 6th WEEK: During these two weeks, I was sent to the customer service
department where the main activity was to attend to the different complaints
from customers.

7th and 8th WEEK: During these weeks, I carried out activities in the cashier
department under the control of my professional supervisor and I equally carried
out a computerized classification of documents, a control and the elaboration of
a journal on the financial transactions of customers and the enterprise. This
enabled me to collect data on the financial performance of the enterprise and
have a knowledge on the profit realized by the enterprise.

9th to 12th WEEK: During this last weeks, I was sent to the commercial
department in which I carried out prospection in different city. During the rest of
the internship period, I carried out activities in the bank service which consist of
countable part pointing, customer’s deposits and withdrawal from accounts,
cheque composting, machine cheque recording, and rapport of the month on
transaction made.

CHALLENGES FACED DURING THE INTERNSHIP PERIOD

Network issues
The enterprise faces a lot of difficulties when it comes to network in order to
render their services and this causes inconviniency in service rendered.
Language
Majority of employees are not able to express themselves in English language,
thereby making it difficult for them to collaborate with their clients. It causes
misunderstanding between the employee and the client.
Competition
The enterprise faces a lot of competition increased competition from other
microfinance institutions and other alternative financial services which therefore
affects their profitability.
Credit risk
They face challenges in assessing the credit worthiness of their customers
especially in low income communities leading to loan default which also affect
the bank’s profitability.

PRACTICAL KNOWLEDGE GAINED

During the internship at la MEC SA I gained some practical knowledge like;
Composting a chequebook:
Composting a chequebook means personalizing a chequebook with a client's
name and account number, so that the account number and the name of the
cheque bearer are found on it.
The steps to compost a chequebook are:
1. Request registration: The chequebook request is registered in the bank's
system (Eloge Bank).
2. Chequebook personalization: The chequebook is personalized with the client's
information, including their name and account number.
3. Receiving the cheques: The personalized cheques are then received in the
system.
These steps are typically performed by machines to ensure accuracy and
efficiency.
4. Applying the stamp: A stamp is used to enter the client's information on each
page of the chequebook.
Account opening:
The MEC SA offers several types of accounts. To open a savings account, the
following steps are required:
1. Fill out the account opening form
2. Create the account in the system
3. Open the account in the system
4. Fill out the signature card and sign
5. Sign the account opening agreementSS
Required Documents
To open an account, the following documents are required: Prospection in
Banking:
1. Account opening form, signature card, and account opening agreement
provided by MEC SA
2. Copy of identification document (e.g., ID card or passport)
3. Location plan
4. Unique identifier number
5. 3 passport-sized photos (4x4) for the signature card, account opening form,
and savings book
The same procedure applies to opening a checking account, with the addition of
a checking account agreement.
Prospection
In the banking domain, prospection refers to the process of identifying,
targeting, and acquiring new potential clients or customers. This involves
searching for individuals or businesses that may be interested in the bank's
products or services, such as accounts, loans, credit cards, or investments.
Key Objectives:
1. Client Acquisition: Identify and acquire new clients to increase the bank's
customer base.
2. Business Growth: Drive business growth by expanding the bank's customer
portfolio.
3. Revenue Increase: Increase revenue through the sale of banking products and
services.
Prospection Activities:
1. Market Research: Analysing market trends, competition, and potential client
segments.
2. Lead Generation: Identifying and generating leads through various channels,
such as referrals, advertising, or events.
3. Client Profiling: Creating profiles of potential clients to understand their
needs and preferences.
4. Outreach and Engagement: Contacting and engaging with potential clients to
build relationships and offer banking solutions.
Importance:
1. Competitive Advantage: Effective prospection helps banks stay competitive
and attract new clients.
2. Revenue Growth: Successful prospection leads to increased revenue and
business growth.
3. Market Expansion: Prospection enables banks to expand their market share
and reach new customer segments.
In summary, prospection in banking is a critical process that involves identifying
and acquiring new potential clients to drive business growth, increase revenue,
and expand market share.
Endorse a cheque:
Means to fill the back of the cheque with information like; the name of the
beneficiary, the number of the Id, the date and place of delivery of the Id, the
phone number and the signature.
Discounting a cheque:
It refers to the process of paying out a cheque before its due date, this typically
involves a financial a financial institution or a cheque cashing service agreeing
to pay the cheque amount before the due minus fee or interest. At la MEC SA
the interest collected from this operation is 3% tax exclusive.

In this process, the beneficiary fills some documents like;

Acknowledgement of debt form; here the beneficiary acknowledges that if the

cheque is not paid, he owes money to the institution and most pay in any case of
default. The beneficiary most has a guarantee who also signs the debt
acknowledgement in case of default he might also be held to pay back the
money.

Cheque discount request form; containing the information of the beneficiary

requesting the microfinance to pay the cheque before due date.

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1. Overview
The arrangement of this Chapter gives various steps consisting of methods and
techniques that will be adopted by the researcher in studying the research
problem along with the logic behind them. Basically, the chapter discusses and
presents the Research design, Description of the study area and population,
Sampling frame, Sample size, Sampling techniques, Types and sources of data,
Data collection methods, and Data presentation and analysis.
3.2. Research Design

According to Kothari (2004) a research design is “the arrangement of conditions

for collection and analysis of data in a manner that aims to combine relevance to
the research purpose with economy in procedure”. It is the conceptual structure
within which research is conducted; it constitutes the blue print for collection,
measurement and analysis of data. The function of a research design is to
provide a plan of how important data can be amassed with smallest expenditure
of time, efforts and money. The research design as a structure of an enquiry of
data; therefore, this study used an explanatory research design. the nature of the
research requires a combination of qualitative and quantitative techniques. This
approach is necessary as the study aims to assess both the subjective and
objective aspects of small and medium size enterprises growth resulting from
the services provided by microfinance institution. Explanatory designs, as
documented in works like Mugenda and Mugenda(2003) and Kothari(2002) are
considered the most suitable method for social scientists when collecting
original data for describing a population that is extensive to be observed
directly.
3.3 STUDY POPULATION AND SAMPLING TECHNIQUES:
3.3.1: POPULATION OF THE STUDY
3.3.2: Target population
Cooper and Emory (1995) assert that a target population is the total collection of
all elements about which the researcher wishes to make some inferences. A
target population is that which the researcher ultimately wants to generalize
results. This population is sometimes called the parent population and may not
be accessible to the researcher. All the customers and manager of this
microfinance institution constitute the research population.
ii. Accessible Population
The accessible population is simply the population which the researcher
really approached and questioned. To which answers were given to the
questionnaire proposed and made by the researcher. In other words, it is the
portion of the population to which the researcher ha reasonably accessed.

3.3.3: SAMPLE SIZE AND TECHNIQUES

A sample in a general term, a sample refers to a subset of a larger population or

a representative portion of something that is used to gather information, conduct
research, or make references about the whole. It is often not feasible or practical
to collect data from an entire population, so researchers select a sample that can
provide meaningful insights and be representative of the population.
SAMPLE SIZE

Before knowing the sampling size which have being used to conduct
this study, it is important for us to know related terms such as ;a
sample and sampling.
A sample is a smaller but hopefully representative, collective of units
from a population used to determined truths about the population
(Field, 2005). Hence, a sample is a representative sub-set of a
population. Out of the 10 employees and many customers that makes
up the study population, the researcher used 5 members of the staff
and 5 customers. Sampling is the process of selecting a number of
individuals for a study in such a way that, the individuals represent
the larger group from which they were selected.
sampling techniques.

Hamed Taherdoost (2020) indicates sampling is a subset from chosen

sampling frame or the entire population is called sampling. Sampling
can be used to make inferences about a population or to make
generalizations to existing theories. In essence, this depends on the
choice of sampling technique. In general, sampling techniques can be
divided into two types: Probability or random sampling. Non-
probability or non-random sampling. this study used a stratified
sample method because the population was already stratified. The
strata consisted of electronic shops, general merchandise outlets,
boutique shops, restaurants, hardware shops, and bank agents.

A sampling technique is therefore, the name or other identification of

the specific process by which the entities of the sample have been
selected. In carrying out this research, random sampling designs will
be used.

DATA COLLECTION METHODS / PROCEDURE

According to Guest, Namey and Mitchell (2013), data collection is a procedure
that involves gathering information on targeted variables in a way that is well
established which enables the researcher to relevantly answer the questions and
evaluating the results. In carrying out this research at la MEC SA WARDA, the
researcher used basically two methods in gathering information on the impacts
 of MFIs on the growth of small and medium size enterprises. The methods of
data collection which were been used by the researcher were the Primary and
Secondary methods of data collection.

Primary method of collection.

According to Geopoll ,2021 primary method refers to information gathered

through self-conducted research methods. Primary data also refers to data
collected from first-hand experience directly from the main source. It refers
to data that has never been used in the past. The data gathered by primary
data collection methods are generally regarded as the best kind of data in
research. The primary method of data collection can be further divided into
two that is; quantitative and qualitative method of data collection.

Quantitative method of data collection refers to the collection of numerical

data that can be analysed using statistical methods and qualitative data
collection method deals with factors that are not necessarily numerical in
nature. The most common primary data collection methods are; Interviews,
Observations, Focus Groups, questionnaires and Oral Histories.

Secondary method of data collection

According to Formpl 2021 secondary research is a common approach to a

systematic investigation in which the researcher depends solely on existing
data in the course of the research process. Secondary data refers to data that
has already been collected by someone else. It is much more inexpensive
and easier to collect than primary data. The most common secondary data
collection methods are; Internet, Government Archives, Libraries,
textbooks.

Reasons for data collection methods

 There are several reasons that justify the use of data collection methods. The
reasons for data collection methods are the following;
• It is also very effective because it is used to obtain both questionnaire and
survey methods.

• It is economical and less expensive.

• The researchers are able to find out the impact of microfinance institution on
the development of SMEs.

• It is very accurate.
TECHNIQUES/TOOLS FOR DATA COLLECTION

Techniques for data collection.

Different methods for gathering information regarding specific variables of

the study aiming to employ them in the data analysis phase to achieve the
results of the study, gain the answer of the research questions or test the
hypotheses are referred to as data collection.

Data collection as a main stage in research can overshadow the quality of

achieving results by decreasing the possible errors which may occur during
a research project. Therefore, alongside a good design for the study, plenty
of quality time should be spent in the collection of data to gain appropriate
results since insufficient and inaccurate data prevents assuring the accuracy
of findings (Kabir, 2016). On the other hand, although a suitable data
collection method helps to plan good research, it cannot necessarily
guarantee the overall success of the research project (Olsen, 2012). The
embodied information in terms of figures or facts used to analyse for
different calculations and finally gain a result to address the study question
or hypothesis testing is known as data (Hurrel, 2005). Data collection
techniques include interviews, observations (direct and participant),
questionnaires, and relevant documents (Yin, 2014). Data collection is
generally done after the experiment or observation.

Data collection can be categorized using different ways including primary

and secondary methods of data collection. Under the primary techniques
we have; Interviews, observation, questionnaire, Focus Groups and Oral
Histories. Under the secondary techniques we have; Textbooks, internet,
Government Archives, Libraries, and Internship Documents. Primary data
and secondary data are helpful in planning and estimating. These
techniques will be explained as seen below.

 Questionnaire.

A questionnaire is a written list of questions that are answered by a number

of people (respondents) so that information can be collected from the
respondents (Hornsby 2006). Questionnaires provide a broad perspective
from large groups of people. The questionnaire is written in a simple and
clear language for the respondent to feel free while answering.

In addition to that the use of questionnaire is considered vital to the

research since it provides accurate information regarding the study. The
questionnaire shall be divided into two sections; the first section shall focus
on the personal data of the respondents while the second section shall focus
on the subject matter of the study. The research instruments being the
questionnaires will be administered by the researcher and a face-to-face
approach will be adopted in the process of administering the
questionnaires.

 Interviews.

Interviews are a direct method of data collection. It is simply a process in

which the interviewer asks questions and the interviewee responds to them.
It provides a high degree of flexibility because questions can be adjusted
and changed anytime according to the situation. There exist structured and
unstructured interviews According to Harapa (2021). Structured interviews
are comparable to a questionnaire with the same questions in the same
order for each subject and with multiple choice answers.

Unstructured interviews are questions asked orally without a chronological

form or order to respect. Some advantages of interviews are the fact that
interviews are useful to obtain detail information about personal feelings,
perception and opinions, they allow more detailed questions to be asked.

 Internet.
The use of the Internet has become one of the most popular secondary data
collection methods in recent times. Internet also known as World Wide Web is a
global and vast network of computers that allows the sharing of information
from one computer to another. There is a large pool of free and paid research
resources that can be easily accessed on the Internet. The researcher used
internet in other to find data which was not readily available at the institution
and in textbooks particularly on the models and aspects of Microfinance and
SMEs.
 Textbooks.
A textbook is a book containing facts about a particular subject that is used
by people studying that subject (Collins Dictionary 2020).

In this study, the researcher has used a number of textbooks from national
and international authors having as authors MICRO FINANCE
HANDBOOK an Institutional and Financial perspective written by Joanna
Ledger wood.

 Government archives.

There is lots of data available from government archives that we can make
use of. The most important advantage is that the data in government
archives are authentic and verifiable. The challenge, however, is that data is
not always readily available due to a number of factors.

 Libraries.

Researchers donate several copies of their academic research to libraries.

You can collect important and authentic information based on different
research contexts. Libraries also serve as a storehouse for business
directories, annual reports and other similar documents that help businesses
in their research.

 Internship documents.

These are documents which have being given to the researcher at his place
of internship. This documents have not only given the researcher data on
the topic of study but also had much information on the services offered by
the enterprise (La MEC SA WARDA) her objectives and history.

 Observations.

In this method, researchers observe a situation around them and record the
findings. It can be used to evaluate the behaviour of different people in
controlled (everyone knows they are being observed) and uncontrolled (no
one knows they are being observed) situations. This method is highly
effective because it is straightforward and not directly dependent on other
participants.

The systematic observation of the training practice was carried out through
direct and indirect observation. Direct observation was done through our
experiences during the internship and research period. This was made up of
observing the strategies used in the company and how it functions. Also,
how frequent the strategies are being used. Passive and active observation
was conducted.
Passive observation is when the observation is done with minimum
interaction between the researcher and the subject of study. That is to say,
the researcher observes the activities of the employees of the institution
without taking part in those activities meanwhile with the active
observation, the researcher takes part in the activities of the employees of
the institution. This active observation helped and enabled the researcher to
collect important information that could not be answered.

Tools for data collection.

Now that we’ve explained the various techniques, let’s narrow our focus
even further by looking at some specific tools. For example, we mentioned
interviews as a technique, but we can further break that down into different
interview types (or “tools”).

a. Word Association:
The researcher gives the respondent a set of words and asks them
what comes to mind when they hear each word.

b. Sentence Completion:
Researchers use sentence completion to understand what kind of
ideas the respondent has. This tool involves giving an incomplete
sentence and seeing how the interviewee finishes it.
c. Role-Playing:
Respondents are presented with an imaginary situation and asked
how they would act or react if it was real.
d. In-Person Surveys:
The researcher asks questions in person.
e. Online/Web Surveys:
 These surveys are easy to accomplish, but some users may be
unwilling to answer truthfully, if at all.
f. Mobile Surveys:
These surveys take advantage of the increasing proliferation of
mobile technology. Mobile collection surveys rely on mobile
devices like tablets or smartphones to conduct surveys via SMS
or mobile apps.
DATA ANALYSIS PROCEDURE AND ESTIMATION
TECHNICS.